If you are always in the igaming loop, either as an avid gambler or a casual follower, you probably already know about the regulations driving the unprecedented growth of Canada’s iGaming and online sports betting in recent years.
This growth – Ontario’s Gross Gambling Revenue (CGR) recently exceeded CA$3.2 billion – has led to more money moving through the industry than ever before, and, with it, an increase in fraud cases.
Unsurprisingly, this has made fraud prevention a significant part of the Canadian online gaming experience.
From KYC to extra verification steps before withdrawals and payments being flagged for review, platforms are getting more vigilant in fraud prevention.
In this piece, we highlight why fraud prevention is no longer invisible to players and explain what these verification steps are doing.
iGaming Ontario has changed the rules
iGaming Ontario launched its regulated market in the first quarter of 2022, with the intention of bringing offshore operators under a legal framework.
It implements strict compliance measures to ensure consumer protection and financial transparency. The regulator enabled private online casinos and sportsbooks to legally operate in Ontario for the first time.
There has been a direct ripple effect on fraud prevention as license operators are required to maintain Anti-Money Laundering programs and report any suspicious activities to the relevant authorities. Operators who don’t enforce these measures risk losing the licenses required to operate in the province.
Player protection is especially taken seriously, with Joseph Hillier, the CEO of iGO, saying that they are working on rolling out a centralized self-inclusion system that will allow players to ban themselves from all the iGaming sites in the province simultaneously.
Other measures include cooperation with other agencies and partners like the Alcohol and Gaming Commission of Ontario, the Responsible Gambling Council, and the provincial government.
“We’re looking to continue to collaborate,” Hillier said. “And that was one of the other key themes that I found came out here is measuring outcomes, but also collaborating in the sector to determine what the best tools are in place to really help players. And so that’s going to continue to be a focus for us.”
The compliance measures seem to be working with the regulated iGaming market in Ontario, finishing March with a new wagering record of about $95.9 billion.
The milestone marked four years of continuous year-on-year growth since iGaming Ontario launched. Online casino products generated 82% of all the revenue, and sports betting declined 9% over the year.
What does fraud look like in online gaming?
The challenge for regulators and operators is to build a robust fraud detection system, all while players experience platforms with seamless gameplay. Fraudulent activity harms operators financially and erodes players’ trust in the entire system.
There are many forms of fraud in the online gaming market, and the entire Canadian market is not immune to these fraud attacks.
Abuse of welcome bonuses is the most common, and it’s where individuals can create multiple accounts to repeatedly claim welcome offers and free spins intended for new players only.
It may seem harmless at face value, but it creates a distorted picture of player activity that could mask more serious misconduct. Platforms also stand to lose significant revenue.
Fraudsters can also illegally gain access to a player’s account through phishing or other dubious means and drain the account balance.
This is even more damaging because some withdrawal methods are obscure and difficult to trace once funds are released.
Money laundering is also a serious concern, and platforms can be exploited to launder illegally obtained funds. Large deposits and withdrawals usually trigger additional scrutiny, regardless of the account, to catch such activities early.
How licensed platforms protect players?
For most players, KYC is the most visible part of fraud prevention. The best paying online casinos licensed in Canada require players to provide their ID, proof of address, and a selfie before they can approve the first withdrawal.
Players might view the process as an inconvenience, but it confirms whether a player is who they say they are, and verified profiles make it harder for fraudsters to operate under stolen identities.
Two-factor authentication (2FA) has also become standard on most licensed platforms, and it adds a layer of protection at the login stage.
Fraudsters who might access a player’s password are still unable to access the account without the registered phone or email.
Other methods include payment screening, in which licensed operators run transactions through systems that cross-reference payment details against known fraud databases.
Cards flagged for fraudulent activities or linked to sanctioned individuals are blocked before transactions can be completed.
